Originally posted by: TonyPearson

Continuing my blog coverage of the [Forrester IT Forum 2009 conference],I will group a bunch of topics related to Cloud Computing into one post. Cloud Computing was a big topichere at the IT Forum, and probably was also in the other two conferences IBM participated in this week inLas Vegas:

• [Manhattan Momementum 09] focused on supply chain software and solutions
• [Interop IT Expo and Conference] aimed at a more technical audience

The CIOs and IT professionals at this Forrester IT Forum seemed to be IT decision makers with a broader view. There was a lot of interest in Cloud Computing. What is Cloud Computing? Basically, it is renting IT capability on an as-needed basis from a computing service provider. The different levels of cloud computing depends on what the computing service provider actually provides. How do these compare with traditional co-location facilities or your own in-house on-premises computing? Here's my handy-dandy quick-reference guide:

Level	Facility	Systems	OS/Middleware	Application	Users
Cloud Software-as-a-Service [SaaS], Examples: SalesForce and Google Apps.	Yes	Yes	Yes	Yes	No
Cloud Platform-as-a-Service [PaaS], such as Google AppEngine, Microsoft Azure, or IBM's own [Computing On Demand].	Yes	Yes	Yes	No	No
Cloud Infrastructure-as-a-Service [IaaS], such as Amazon EC2, RackSpace.	Yes	Yes	No	No	No
Tradtional Co-Location facility, you park your equipment on rented floorspace, power, cooling and bandwidth.	Yes	No	No	No	No
Traditional On-Premises, what most people do today, build or buy your own data center, buy the hardware, write or buy the software, then install and manage it.	No	No	No	No	No

A main tent session had a moderated Q&A panel of three Forrester Analysts titled "Saving, Making and Risking Cash with Cloud Computing." Here are some key points from this panel:

• Is Cloud Computing just another tool in the IT toolbox, or does it represent a revolution? The panel gave arguments for both. As a set of technology, protocols and standards, it is an evolutionary progression of other standards already in place, and an extension of methods used in co-location and time-share facilities. However,from a business model perspective, Cloud Computing represents a revolutionary trend, eliminating in some cases huge up-front capital expenses and/or long-term outsourcing contracts. PaaS and IaaS offerings can be rented by the hour, for example.

• An example of using Cloud Computing for a one-time batch job: The New York Times decided to build an archive of 11 million articles, but this meant having to convert them all from TIFF to PDF format. The IT person they put in charge of this rented 100 machines on [Amazon Elastic Compute Cloud (EC2)] for 24 hours and was able to convert all 4TB of data for only $240 US dollars.

• Cloud Computing can make it easier for companies to share information with clients, suppliers and business partners, eliminating the need to punch holes through firewalls to provide access.

• Since it is relatively cheap for companies to try out different cloud computing offerings with little or no capital investment, the spaghetti model applies--"throw it on the wall, and see what sticks!"

• What application areas should you consider running in the cloud? Employee self-service portals-Yes, ERP-Mixed, On-time batch jobs-Mixed, Email-Yes, Access Control-No, Web 2.0-Mixed, Testing/QA-Mixed, Back Office Transactions-No, Disaster Recovery-Mixed.
• Different IT roles will see varying benefits and risks with cloud computing. However, by 2011, every new IT project must answer the question "Why not run in the cloud?"

There were a variety of track sessions that explored different aspects of cloud computing:

Software-as-a-Server: When and Why

This session had three Forrester analysts in a Q&A panel format. SaaS can provide much-needed relief from application support, maintenance and upgrade chores. The choice and depth of offerings is improving from SaaS providers. However, when comparing TCO between SaaS and on-premises deployments, can yield different results for different use cases. For example, a typical SaaS rate of $100 US dollars per user per month, with discounts, could be $1000 per year, or $10,000 over a 10-year period. Compare that to the total 10-year costs of an on-premises deployment, and you have a good ball-park comparison. SaaS can provide faster time-to-value, and you can easily just try-before-you-buy several alternative offerings before making a decision.

The downside to SaaS is that you need to understand their data center, where it is located, and how it is protected for backup and disaster recovery. Some SaaS providers have only a single data center, so it mightbe disruptive if it experiences a regional disaster.

Cloud IT Services: The Next Big Thing or Just Marketing Vapor?

Economic pressures are forcing companies to explore alternatives, and Cloud IT services are providingadditional options over traditional outsourcing. Only 70-80 percent of companies are satisfied with traditionaloutsourcing, so there is opportunity for Cloud IT services to address those not satisfied. Scalable, consumption-based billing with Web-based accessibility and flexibility is an attractive proposition. Tenyears ago, you could not buy an hour on a mainframe with your credit card, now you can.

Cloud technologies are mature, and there is interest in using these services. About 10 percent of companies are piloting SaaS offerings, 16 percent piloting PaaS offerings, and 13 percent investing in deploying "private clouds" within their data center. This week Aneesh Chopra, who is Barack Obama's pick as the first CTO for the US Federal Government, [stated to congressional leaders]: “The federal government should be exploring greater use of cloud computing where appropriate.”

IBM is betting heavily on their Cloud Computing strategy, has already gone through the reorganizations needed to be positioned well, and claims to have thousands of clients already. HP has some cloud offerings focused on their enterprise customers. Dell is investing and reorganizing for cloud as well.

Network Strategic Planning for Challenging Times

While not limited to Cloud Computing, companies are seeing WAN traffic doubling every 18 months, but withoutthe corresponding increases in budget to cover it. The Forrester analyst covered WAN optimization management services, hybrid Ethernet-MPLS offerings to help people transition from MPLS VPNs to Carrier-grade Ethernet.

Who should you hire for WAN optimization? Do you trust your own Telco that provides your bandwidth to help you figure out ways to use less of it? Alternatives include System Integrators and Service providers like IBM and EDS.Or, you could try to do it yourself, but this requires capital investment in gear and performance monitoring software.

New workloads like Voice over IP (VoIP) and digital surveillance can help cost-justify upgrading your MPLS VPNs to Carrier-grade Ethernet. The possibility of converging this with iSCSI and/or Fibre Channel (FC) over Ethernet (FCoE) and this can help reduce costs as well. Both MPLS and Ethernet will co-exist for awhile, and hybrid offerings from Telcos will help ease the transition. In the meantime, switching some workloads to Cloud Computing can provide immediate relief to in-house networks now. Converging voice, video, LAN, WAN and SAN traffic may require the IT departments to reorganize how the IT role of "network administrator" is handled.

Navigating the Myriad New Sourcing Models

The landscape of outsourcing has changed with the introducing of new Cloud Computing offerings. However, adapting these new offerings to internal preferences may prove challenging. The Forrester analyst suggesting being ready to try to influence their companies to adopt Cloud Computing as a new sourcing option.

Traditional outsourcing just manages your existing hardware and software, often referred to as "Your mess for less!" However, outsourcing contract law is mature and many outsource providers are large, well-established providers. In contrast, some SaaS providers are small, and the few that are largemay be fairly new to the outsourcing business. Here are some things to consider:

• Where will the data physically be located? There are government regulations, such as the US Patriot Act, that can influence this decision.Many Canadian and European customers are avoiding providers where datais stored in the United States for this reason.

• What is the service delivery chain? Some cloud providers in turn useother cloud providers. For example a SaaS provider might develop the software and then rent the platform it runs on from a PaaS, which in turn mightbe using offshore or co-location facilities to actually house their equipment.Knowing the service delivery chain may prove important on contractnegotiations. Clarify "cloud" terminology and avoid mixed metaphors.

• What is their contingency plan? What is your contingency plan if the system is slow or inaccessible. What is their plan to protect against data loss during disasters? What if they go out of business? Source Code Escrow has proven impractical in many cases. SLAs should provide for performance, availability and other key metrics. However, service level penalties are not a cure-all for major disruptions, loss of revenues or reputation.
• How will they handle security, compliance and audits? Heavy regulatory requirements may favor dedicated resources to be used.

• Who has "custodianship" of the data? Will you get the data back if you discontinue the contract? If so, what format will it be in, and will it make any sense if you are not running the same application as the cloud provider?

• Will they provide transition assistance? Moving from on-premises to cloud may involve some effort, including re-training of end users.

• Are the resources shared or dedicated? For shared resource environments, is the capacity "fenced off" in any way to prevent having other clients impact your performance or availability.

I am glad to see so much interest in Cloud Computing. To learn more, here is IBM's [Cloud Computing] landing page.

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